I.T.O Wd - 30(1),kolkata, Kolkata V. M/s Balaji Developers, Kolkata

ITA 1787/KOL/2013

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0995 (ITAT-KOLKATA)
• Duration Of Justice: 6 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GAUTAM B ANERJEE
• Keywords: TDS
• Section: 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER) ITA NO. 1787/KOL/2013 ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER, WARD-30(1), KOLKATA....................................................................APPELLANT VS. M/S. BALAJI DEVELOPERS..........................................................................RESPONDENT 102C, BALLYGUNGE PLACE KOLKATA 700 019 [PAN : AAFFB 9223 K] APPEARANCES BY: ALTAF HUSSAIN, JCIT SR. D/R, APPEARING ON BEHALF OF THE REVENUE. SHRI GAUTAM BANERJEE, FCA, APPEARED ON BEHALF OF THE ASSESSEE. DATE OF CONCLUDING THE HEARING : AUGUST 13 TH , 2019 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 6 TH , 2019 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XIV, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 28/03/2013, FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN THE BUSINESS OF CONSTRUCTIONS OF HOUSES/APARTMENTS. IT FILED ITS RETURN OF INCOME ON 23/09/2009 DISCLOSING TOTAL INCOME OF RS.24,64,131/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 26/12/2011, DETERMINING THE TOTAL INCOME AT RS.4,61,08,590/- INTERALIA MAKING ADDITIONS ON ACCOUNTS OF NON-DEDUCTION OF TDS, PAYMENT MADE TO THE SPACE OWNERS, KMC PLAN SANCTION FEES, INTEREST FREE ADVANCE TO THE PARTNERS, SALARY TO THE PARTNERS AND VALUATION OF CAPITAL WORK IN PROGRESS. FURTHER AN ADDITION OF RS.2,42,37,820/-, WAS MADE UNDER THE HEAD INCOME FROM OTHER SOURCES BEING ADVANCE FROM CUSTOMERS. ON APPEAL, THE LD. FIRST APPELLATE AUTHORITY, GRANTED PART RELIEF. 3. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US, ON THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.22,65,830/- ON BOGUS SPACE OWNERS PAYMENT, WITHOUT CONSIDERING THE FACT THAT THEY DO NOT BELONG TO PROJECT SITE OF THE ASSESSEE AS EVIDENT FROM HIS ANNUAL REPORT FOR THE F.Y SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS IN IGNORING THE FACT THAT THE ASSESSEE COULD NOT ESTABLISH THE CORRELATION OF PAYMENT OF RS.29,16,045/ 3. WHET HER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS IN IGNORING THE FACT THAT ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF CLAIM OF ADVANCE OF RS. 2,24,37,820/ BEFORE THE A. Y. 2009-1 0. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C WAS RIGHT IN LAW AS WELL AS ON FACTS ALLOWING PROPORTIONATE RELIEF OF RS. 75,40,000/ IGNORING THE FACT THAT THE ASSESSEE FOLLOWED PROJECT COMPLETION METHOD AND FURTHER IG NORING THE FACT THAT THE ASSESSEE DEBITED RS. 1,21,92,573/ VIVEKANANDA SARANI PROJECT, THOUGH THEY HAD NO INCOME FROM THIS PROJECT. 5. THAT THE APPELLANT CRAVES TO MAKE ANY ADDITION, ALTERATION, MODIFICATION, DELETE OF GROUNDS AT THE AP 4. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: 5. GROUND NO. 1, IS AGAINST THE DISALLOWANCE OF AMOUNT PAID TO SPACE OWNERS. THE ASSESSING OFFICER HELD THE SAME AS BOGUS FOR THE REASON THAT HE WAS OF THE VIEW THAT THE PAYMENT WAS FOR THREE PROJECTS. THE ASSESSEES CASE IS THAT, THE PAYMENTS WERE ONLY FOR TWO PROJECTS. THE HAVING CONSIDERED THE FACTS ON RECORD, I AM OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER HAS DRAWN CONCLUSIONS MERELY ON THE BASIS OF SURMISES AND CONJECTURE. HOWEVER, ON THE CONTRARY, THE LD. AUTHORISED REPR SHOWN THAT ONLY TWO PROJECTS WERE UNDERTAKEN BY THE APPELLANT AND A SUM OF RS.22,00,000/- ONLY WAS ALLOWED BY THE ASSESSING OFFICER. I FIND THAT THE PAYMENTS HAVE BEEN MADE BY CHEQUE AND THE DISALLOWED AMOUNT OF RS.22,65,830/ TO THE TWO PROJECTS, NAMELY; 242, RASH BEHARI AVENUE PROJECT AND 57, VIVEKANADA SARANI PROJECT, UNDERTAKEN BY THE APPELLANT. THESE ARE ALLOWABLE EXPENSES WHICH IS ALSO EVIDENT FROM THE FACT THAT A PART OF SUCH EXPENSES TO THE TUNE OF RS.22,00,000/- HAS BEEN ALLO FOREGOING DISCUSSION THE ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLOWANCE OF RS.22,65,830/- . ACCORDINGLY, THE GROUND NO. 3 OF THE APPEAL IS ALLOWED. 5.1. THE LD. D/R, COULD NOT CONTRADICT THIS FAC UPHOLD THE SAME AND DISMISS THIS GROUND OF THE REVENUE. 2 SITE OF THE ASSESSEE AS EVIDENT FROM HIS ANNUAL REPORT FOR THE F.Y SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS IN IGNORING THE FACT THAT THE ASSESSEE COULD NOT ESTABLISH THE CORRELATION OF PAYMENT OF RS.29,16,045/ - TO KMC WITH HIS BUSINESS. HER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS IN IGNORING THE FACT THAT ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF CLAIM OF ADVANCE OF RS. 2,24,37,820/ 0. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C A SE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS ALLOWING PROPORTIONATE RELIEF OF RS. 75,40,000/ IGNORING THE FACT THAT THE ASSESSEE FOLLOWED PROJECT COMPLETION METHOD AND FURTHER NORING THE FACT THAT THE ASSESSEE DEBITED RS. 1,21,92,573/ - , BEING THE COST OF VIVEKANANDA SARANI PROJECT, THOUGH THEY HAD NO INCOME FROM THIS PROJECT. THAT THE APPELLANT CRAVES TO MAKE ANY ADDITION, ALTERATION, MODIFICATION, DELETE OF GROUNDS AT THE AP PELLATE STAGE. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: - AGAINST THE DISALLOWANCE OF AMOUNT PAID TO SPACE OWNERS. THE ASSESSING OFFICER HELD THE SAME AS BOGUS FOR THE REASON THAT HE WAS OF THE VIEW THAT THE PAYMENT WAS FOR THREE PROJECTS. THE ASSESSEES CASE IS THAT, THE PAYMENTS WERE ONLY FOR TWO PROJECTS. THE LD. CIT(A) AT PAGE 10, HELD AS FOLLOWS:- HAVING CONSIDERED THE FACTS ON RECORD, I AM OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER HAS DRAWN CONCLUSIONS MERELY ON THE BASIS OF SURMISES AND CONJECTURE. HOWEVER, ON THE CONTRARY, THE LD. AUTHORISED REPR ESENTATIVE HAS SHOWN THAT ONLY TWO PROJECTS WERE UNDERTAKEN BY THE APPELLANT AND A SUM OF ONLY WAS ALLOWED BY THE ASSESSING OFFICER. I FIND THAT THE PAYMENTS HAVE BEEN MADE BY CHEQUE AND THE DISALLOWED AMOUNT OF RS.22,65,830/ TWO PROJECTS, NAMELY; 242, RASH BEHARI AVENUE PROJECT AND 57, VIVEKANADA SARANI PROJECT, UNDERTAKEN BY THE APPELLANT. THESE ARE ALLOWABLE EXPENSES WHICH IS ALSO EVIDENT FROM THE FACT THAT A PART OF SUCH EXPENSES TO THE TUNE OF HAS BEEN ALLO WED BY THE ASSESSING OFFICER HIMSELF. IN LIGHT OF FOREGOING DISCUSSION THE ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLOWANCE OF . ACCORDINGLY, THE GROUND NO. 3 OF THE APPEAL IS ALLOWED. THE LD. D/R, COULD NOT CONTRADICT THIS FAC TUAL FINDING OF THE LD. CIT(A). HENCE WE UPHOLD THE SAME AND DISMISS THIS GROUND OF THE REVENUE. ITA NO. 1787/KOL/2013 ASSESSMENT YEAR: 2009-10 M/S. BALAJI DEVELOPERS SITE OF THE ASSESSEE AS EVIDENT FROM HIS ANNUAL REPORT FOR THE F.Y -2008-09, 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS IN IGNORING THE FACT THAT THE ASSESSEE COULD NOT TO KMC WITH HIS BUSINESS. HER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS IN IGNORING THE FACT THAT ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF CLAIM OF ADVANCE OF RS. 2,24,37,820/ - TAKEN SE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN LAW AS WELL AS ON FACTS ALLOWING PROPORTIONATE RELIEF OF RS. 75,40,000/ - IGNORING THE FACT THAT THE ASSESSEE FOLLOWED PROJECT COMPLETION METHOD AND FURTHER , BEING THE COST OF VIVEKANANDA SARANI PROJECT, THOUGH THEY HAD NO INCOME FROM THIS PROJECT. THAT THE APPELLANT CRAVES TO MAKE ANY ADDITION, ALTERATION, MODIFICATION, WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES AGAINST THE DISALLOWANCE OF AMOUNT PAID TO SPACE OWNERS. THE ASSESSING OFFICER HELD THE SAME AS BOGUS FOR THE REASON THAT HE WAS OF THE VIEW THAT THE PAYMENT WAS FOR THREE PROJECTS. THE ASSESSEES CASE IS THAT, THE PAYMENTS HAVING CONSIDERED THE FACTS ON RECORD, I AM OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER HAS DRAWN CONCLUSIONS MERELY ON THE BASIS OF SURMISES AND ESENTATIVE HAS SHOWN THAT ONLY TWO PROJECTS WERE UNDERTAKEN BY THE APPELLANT AND A SUM OF ONLY WAS ALLOWED BY THE ASSESSING OFFICER. I FIND THAT THE PAYMENTS HAVE BEEN MADE BY CHEQUE AND THE DISALLOWED AMOUNT OF RS.22,65,830/ - RELATED TWO PROJECTS, NAMELY; 242, RASH BEHARI AVENUE PROJECT AND 57, VIVEKANADA SARANI PROJECT, UNDERTAKEN BY THE APPELLANT. THESE ARE ALLOWABLE EXPENSES WHICH IS ALSO EVIDENT FROM THE FACT THAT A PART OF SUCH EXPENSES TO THE TUNE OF WED BY THE ASSESSING OFFICER HIMSELF. IN LIGHT OF FOREGOING DISCUSSION THE ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLOWANCE OF . ACCORDINGLY, THE GROUND NO. 3 OF THE APPEAL IS ALLOWED. TUAL FINDING OF THE LD. CIT(A). HENCE WE 6. GROUND NO. 2 IS ON THE DISALLOWANCE OF PAYMENTS MADE TO KMC. THE LD. CIT(A), BASED ON THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER, HELD THAT THE P ENALTY COMPONENT WAS ONLY RS.1,84,134/ MISCELLANEOUS CHARGES OF RS. DISALLOWANCE ON PENALTY CHARGES AND DIRECTED THAT THE BALANCE PAID TO KMC HAS TO BE ALLOWED BY THE A.O . WE FIND NO INFIRMITY IN THIS ORDER OF THE LD. CIT(A) ON THIS ISSUE AS IT IS BASED ON THE REMAND REPORT GIVEN BY THE A.O THIS GROUND OF THE REVENUE. 7. GROUND NO. 3 IS AGAINST THE DELETION OF DISALLOWANCE OF RS.2,43 ADVANCE RECEIVED BY THE ASSESSEE, WHICH WAS ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES BY THE ASSESSING OFFICER. THE ASSESSEES CASE IS THAT, A DETAILED LIST OF PERSONS FROM WHOM ADVANCES WERE RECEIVED BY THE ASSESSEE DURING THE YE FURNISHED BEFORE THE ASSESSING OFFICER WITH ADDRESSES OF THE PARTIES AND THAT ALL THE PAYMENTS WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES AND THAT THE RECEIVED FROM CUSTOMERS TOWARDS BOOKING OF FLATS. THE LD. CIT(A) AT PARA 9.1., REC FOLLOWS:- 9.1. AS REGARDS THE ADVANCES RECEIVED FROM CUSTOMERS, THE SAME CAN BE BROADLY BIFURCATED UNDER THREE CATEGORIES: (I) ADVANCE OF RS.35,00,000/ (II) ADVANCE OF RS.55,00,000/ (III) ADVANCE OF RS.1,61,37,820/ 7.1. THE FIRST TWO CATEGORIES OF RS.35,00,000/ BY THE ASSESSING OFFICER. AS REGARDS THE BALANCE RS.1,61,37,820/ 9.3. RECORDS AS FOLLOWS:- 9.3. AS REGARDS ADVANCE OF RS.1,61,37,820/ THE APPELLANT HAS RECEIVED ADVANCE AGAINST SALE OF PROPERTY. IN THIS REGARD THE APPELLANT HAS PRODUCED THE DEED OF AGREEMENT FOR SALE. THE ASSESSING OFFICER VERIFIED DEED OF AGREEM FROM THE SUBMISSIONS OF THE APPELLANT THAT ALL THE 12 PERSONS ARE ASSESSED TO TAX. THEIR PAN NOS. HAVE BEEN FURNISHED DURING THE APPELLATE PROCEEDINGS AND ALSO BEFORE THE ASSESSING OFFICER. RS.1,61,37,820/- HAVE BEEN RECEIVED DURING THE PERIOD PRIOR TO THE FINANCIAL YEAR 2008-09. SINCE THESE ADVANCES HAVE BEEN RECEIVED DURING THE PERIOD PRIOR TO 3 GROUND NO. 2 IS ON THE DISALLOWANCE OF PAYMENTS MADE TO KMC. THE LD. CIT(A), BASED ON THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER, ENALTY COMPONENT WAS ONLY RS.1,84,134/ - AND THE BALANCE CONSISTED OF MISCELLANEOUS CHARGES OF RS. 24,39,609/- AND SKETCH FEE OF RS.3,000/- DISALLOWANCE ON PENALTY CHARGES AND DIRECTED THAT THE BALANCE PAID TO KMC HAS TO BE . WE FIND NO INFIRMITY IN THIS ORDER OF THE LD. CIT(A) ON THIS ISSUE AS IT THE REMAND REPORT GIVEN BY THE A.O . HENCE WE UPHOLD THE SAME AND DISMISS GROUND NO. 3 IS AGAINST THE DELETION OF DISALLOWANCE OF RS.2,43 ADVANCE RECEIVED BY THE ASSESSEE, WHICH WAS ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES BY THE ASSESSING OFFICER. THE ASSESSEES CASE IS THAT, A DETAILED LIST OF PERSONS FROM WHOM ADVANCES WERE RECEIVED BY THE ASSESSEE DURING THE YE FURNISHED BEFORE THE ASSESSING OFFICER WITH ADDRESSES OF THE PARTIES AND THAT ALL THE PAYMENTS WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES AND THAT THE RECEIVED FROM CUSTOMERS TOWARDS BOOKING OF FLATS. THE LD. CIT(A) AT PARA 9.1., REC 9.1. AS REGARDS THE ADVANCES RECEIVED FROM CUSTOMERS, THE SAME CAN BE BROADLY BIFURCATED ADVANCE OF RS.35,00,000/ - FROM TANUJA KUNDU AND ARUN KUMAR KUNDU. ADVANCE OF RS.55,00,000/ - FROM A.K. KUNDU AND TANUJA KUNDU. ADVANCE OF RS.1,61,37,820/ - FROM 12 PERSONS. THE FIRST TWO CATEGORIES OF RS.35,00,000/ - AND RS.55,00,000/- HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. AS REGARDS THE BALANCE RS.1,61,37,820/ -, THE AS REGARDS ADVANCE OF RS.1,61,37,820/ - FROM TWELVE PERSONS, IT IS SEEN THAT THE APPELLANT HAS RECEIVED ADVANCE AGAINST SALE OF PROPERTY. IN THIS REGARD THE APPELLANT HAS PRODUCED THE DEED OF AGREEMENT FOR SALE. THE ASSESSING OFFICER VERIFIED DEED OF AGREEM ENT OF SALE IN RESPECT OF SEVEN CUSTOMERS. IT IS FURTHER SEEN FROM THE SUBMISSIONS OF THE APPELLANT THAT ALL THE 12 PERSONS ARE ASSESSED TO TAX. THEIR PAN NOS. HAVE BEEN FURNISHED DURING THE APPELLATE PROCEEDINGS AND ALSO BEFORE THE ASSESSING OFFICER. IT I S ALSO SEEN THAT ALL THESE ADVANCES OF HAVE BEEN RECEIVED DURING THE PERIOD PRIOR TO THE FINANCIAL YEAR SINCE THESE ADVANCES HAVE BEEN RECEIVED DURING THE PERIOD PRIOR TO ITA NO. 1787/KOL/2013 ASSESSMENT YEAR: 2009-10 M/S. BALAJI DEVELOPERS THE LD. CIT(A), BASED ON THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER, AND THE BALANCE CONSISTED OF . HE SUSTAINED THE DISALLOWANCE ON PENALTY CHARGES AND DIRECTED THAT THE BALANCE PAID TO KMC HAS TO BE . WE FIND NO INFIRMITY IN THIS ORDER OF THE LD. CIT(A) ON THIS ISSUE AS IT . HENCE WE UPHOLD THE SAME AND DISMISS GROUND NO. 3 IS AGAINST THE DELETION OF DISALLOWANCE OF RS.2,43 ,37,820/- BEING ADVANCE RECEIVED BY THE ASSESSEE, WHICH WAS ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES BY THE ASSESSING OFFICER. THE ASSESSEES CASE IS THAT, A DETAILED LIST OF PERSONS FROM WHOM ADVANCES WERE RECEIVED BY THE ASSESSEE DURING THE YE AR, WERE FURNISHED BEFORE THE ASSESSING OFFICER WITH ADDRESSES OF THE PARTIES AND THAT ALL THE PAYMENTS WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES AND THAT THE SE AMOUNTS WERE RECEIVED FROM CUSTOMERS TOWARDS BOOKING OF FLATS. THE LD. CIT(A) AT PARA 9.1., REC ORDS AS 9.1. AS REGARDS THE ADVANCES RECEIVED FROM CUSTOMERS, THE SAME CAN BE BROADLY BIFURCATED FROM TANUJA KUNDU AND ARUN KUMAR KUNDU. HAS BEEN ACCEPTED LD. CIT(A) AT PARA FROM TWELVE PERSONS, IT IS SEEN THAT THE APPELLANT HAS RECEIVED ADVANCE AGAINST SALE OF PROPERTY. IN THIS REGARD THE APPELLANT HAS PRODUCED THE DEED OF AGREEMENT FOR SALE. THE ASSESSING OFFICER ENT OF SALE IN RESPECT OF SEVEN CUSTOMERS. IT IS FURTHER SEEN FROM THE SUBMISSIONS OF THE APPELLANT THAT ALL THE 12 PERSONS ARE ASSESSED TO TAX. THEIR PAN NOS. HAVE BEEN FURNISHED DURING THE APPELLATE PROCEEDINGS AND ALSO S ALSO SEEN THAT ALL THESE ADVANCES OF HAVE BEEN RECEIVED DURING THE PERIOD PRIOR TO THE FINANCIAL YEAR SINCE THESE ADVANCES HAVE BEEN RECEIVED DURING THE PERIOD PRIOR TO FINANCIAL YEAR 2008- 09, THE ADDITION OF THE SAME IN THE ASS YEAR 2009- 10 CANNOT BE SUSTAINED. 7.2. THIS FACTUAL FINDING OF THE LD. CIT(A), COULD NOT BE CONTROVERTED BY THE LD. D/R. THUS, WE FIND NO REASON TO INTERFERE IN THIS FACTUAL FINDINGS RECORDED BY THE LD. CIT(A) HENCE THIS GROUND OF THE REVENUE IS DISMISSED. 8. GROUND NO. 4 IS ON THE ISSUE OF PROPORTIONATE RELIEF GRANTED BY THE LD. CIT(A) ON THE CLAIM OF THE ASSESSEE THAT IT WAS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING ON CLOSING STOCK. 8.1. AT PARA 12 OF HIS ORDER, THE LD. CIT(A) HELD AS FOLLOWS: THE GROUND NO.8 OF THE APPEAL IS DIRECTED AGAINST THE ADDITION OF ACCOUNT OF VALUATION OF CLOSING WORK SARANI BY FOLLOWING HIS OWN METHODOLOGY BY THE APPELLANT HAS INCURRED TOTAL COST UPTO END OF RELEVANT PREVIOUS YEAR TO THE TUNE OF RS. 1,44,58,403/- . OUT OF THE AFORESAID FIGURE A SUM OF RS. 22,65,830/ FORWARD AS CLOSING WORK- IN HAS CONTENDED THAT THE FOUR FLATS AT MEASURING 990 SQFT. EACH, AND FOUR PARKIN WERE REQUIRED TO BE GI VEN TO THE LAND OWNERS WHICH HAD ACTUALLY BEEN GIVEN TO THEM DURING THE RELEVANT PREVIOUS YEAR, IN ACCORD AGREEMENTS SIGNED WITH THE LAND OWNERS, IN LIEU OF THE LAND TAKEN FROM THEM. IT WAS CONTENDED BY THE LD. AUTHORISED REPRESENTATIVE THAT IN VIEW OF THIS FACT NO REVENUE YIELDED TO THE APPELLANT ON ACCOUNT OF THE SALE OF THE SPACES. HAVING CONSIDERED THE ARGUMENTS OF THE LD. AUTHORISED REPRESENTATIVE OF THE APPELLANT, I FIND THAT THERE IS SUBSTANTIAL FORCE IN THE SUBMISSION OF THE AUTHORISED REPRESENTATIVE THAT THE LD. ASSESSING OFFICER HAS NO TO THE APPELLANT AGAINST THE SAID 4 FLATS AND 4 PARKING SPACES GIVEN TO LAND OWNERS IN LIEU OF THE LAND. IT IS SEEN THAT THE APPELLANT IS IN THE BUSINESS OF BUILDING SHOWN REVENUE OF RS. 3,08,57 SINCE, FOUR FLATS MEASURING 3960 SQFT OWNERS IN ACCORDANCE WITH AGREEMENTS THE CONSIDERED VIEW THAT T THEREFORE, THE TOTAL COST INCURRED UPTO THE END OF THE RELEVANT PREVIOUS YEAR IS ALLOCATED BETWEEN 4 FLATS AND 4 PARKING SPACES GIVEN TO THE LAND OWNERS ON ESTIMATED ACTUAL COST BASIS AND BALAN CE TOWARDS UNSOLD PORTION OF OTHER FLATS WHICH WERE UNDER CONSTRUCTION AS BELOW: COST OF FOUR FLATS (3960 SQFT X @ RS.1500/ ADD: COST OF 4 COVERED PARKING SPACES @ RS4,00,000 X 4= TOTAL ALLOWABLE COST GRAND TOTAL OF COST/EXP. UPTO THE END OF THE YEAR LESS: PROPORTIONATE COST ALLOCATED LESS: CLOSING WORK-IN- PROGRESS DECLARED BY THE APPELLANT COST/EXPENDITURE NOT ALLOWAB 4 09, THE ADDITION OF THE SAME IN THE ASS ESSMENT FOR ASSESSMENT 10 CANNOT BE SUSTAINED. (EMPHASIS OURS) THIS FACTUAL FINDING OF THE LD. CIT(A), COULD NOT BE CONTROVERTED BY THE LD. D/R. THUS, WE FIND NO REASON TO INTERFERE IN THIS FACTUAL FINDINGS RECORDED BY THE LD. CIT(A) THIS GROUND OF THE REVENUE IS DISMISSED. GROUND NO. 4 IS ON THE ISSUE OF PROPORTIONATE RELIEF GRANTED BY THE LD. CIT(A) ON THE CLAIM OF THE ASSESSEE THAT IT WAS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING ORDER, THE LD. CIT(A) HELD AS FOLLOWS: - THE GROUND NO.8 OF THE APPEAL IS DIRECTED AGAINST THE ADDITION OF RS. 1,21,92,573/ ACCOUNT OF VALUATION OF CLOSING WORK -IN- PROGRESS OF THE PROJECT AT 57, VIVEKANANDA SARANI BY FOLLOWING HIS OWN METHODOLOGY BY THE ASSESSING OFFICER. IT IS SEEN THAT THE APPELLANT HAS INCURRED TOTAL COST UPTO END OF RELEVANT PREVIOUS YEAR TO THE TUNE OF RS. . OUT OF THE AFORESAID FIGURE A SUM OF RS. 22,65,830/ - HAS BEEN CARRIED IN -PROGRESS IN THE VIVEKANANDA SARANI PROJECT. THE APPELLANT HAS CONTENDED THAT THE FOUR FLATS AT MEASURING 990 SQFT. EACH, AND FOUR PARKIN VEN TO THE LAND OWNERS WHICH HAD ACTUALLY BEEN GIVEN TO THEM DURING THE RELEVANT PREVIOUS YEAR, IN ACCORD ANCE WITH THE REQUIREMENTS OF THE AGREEMENTS SIGNED WITH THE LAND OWNERS, IN LIEU OF THE LAND TAKEN FROM THEM. IT WAS CONTENDED BY THE LD. AUTHORISED REPRESENTATIVE THAT IN VIEW OF THIS FACT NO REVENUE YIELDED TO THE APPELLANT ON ACCOUNT OF THE SALE OF THE SAID FOUR FLATS AND FOUR PARKING SPACES. HAVING CONSIDERED THE ARGUMENTS OF THE LD. AUTHORISED REPRESENTATIVE OF THE APPELLANT, I FIND THAT THERE IS SUBSTANTIAL FORCE IN THE SUBMISSION OF THE AUTHORISED REPRESENTATIVE THAT THE LD. ASSESSING OFFICER HAS NO T GIVEN BENEFIT OF NOTIONAL LAND COST TO THE APPELLANT AGAINST THE SAID 4 FLATS AND 4 PARKING SPACES GIVEN TO LAND OWNERS IN LIEU OF THE LAND. IT IS SEEN THAT THE APPELLANT IS IN THE BUSINESS OF BUILDING CONSTRUCTION. IT HAS SHOWN REVENUE OF RS. 3,08,57 ,000/- IN THE PROJECTS NAMED RASH BIHARI AVENUE PROJECT. SINCE, FOUR FLATS MEASURING 3960 SQFT . AND FOUR PARKING SPAC ES HAVE BEEN SOLD OUT TO LAND OWNERS IN ACCORDANCE WITH AGREEMENTS WITH THE DEVELOPERS AND THE LAND OWNERS, I AM T HE CORRESPONDING PROPORTIONATE COST IS ELIGIBLE FOR DEDUCTION. THEREFORE, THE TOTAL COST INCURRED UPTO THE END OF THE RELEVANT PREVIOUS YEAR IS ALLOCATED BETWEEN 4 FLATS AND 4 PARKING SPACES GIVEN TO THE LAND OWNERS ON ESTIMATED ACTUAL COST CE TOWARDS UNSOLD PORTION OF OTHER FLATS WHICH WERE UNDER CONSTRUCTION COST OF FOUR FLATS (3960 SQFT X @ RS.1500/ - PER SQFT) = RS.59,40,000/- ADD: COST OF 4 COVERED PARKING SPACES @ RS4,00,000 X 4= RS.16,00,000/- TOTAL ALLOWABLE COST RS.75,40,000/- UPTO THE END OF THE YEAR RS.1,44,58,403/- LESS: PROPORTIONATE COST ALLOCATED RS.75,40,000/- RS.69,18,403/- PROGRESS DECLARED BY THE APPELLANT RS.22,65,803/- COST/EXPENDITURE NOT ALLOWAB LE DURING THE RELEVANT RS.46,52,573/- ITA NO. 1787/KOL/2013 ASSESSMENT YEAR: 2009-10 M/S. BALAJI DEVELOPERS ESSMENT FOR ASSESSMENT THIS FACTUAL FINDING OF THE LD. CIT(A), COULD NOT BE CONTROVERTED BY THE LD. D/R. THUS, WE FIND NO REASON TO INTERFERE IN THIS FACTUAL FINDINGS RECORDED BY THE LD. CIT(A) . GROUND NO. 4 IS ON THE ISSUE OF PROPORTIONATE RELIEF GRANTED BY THE LD. CIT(A) ON THE CLAIM OF THE ASSESSEE THAT IT WAS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING 1,21,92,573/ - ON PROGRESS OF THE PROJECT AT 57, VIVEKANANDA ASSESSING OFFICER. IT IS SEEN THAT THE APPELLANT HAS INCURRED TOTAL COST UPTO END OF RELEVANT PREVIOUS YEAR TO THE TUNE OF RS. HAS BEEN CARRIED VIVEKANANDA SARANI PROJECT. THE APPELLANT HAS CONTENDED THAT THE FOUR FLATS AT MEASURING 990 SQFT. EACH, AND FOUR PARKIN G SPACES VEN TO THE LAND OWNERS WHICH HAD ACTUALLY BEEN GIVEN TO THEM ANCE WITH THE REQUIREMENTS OF THE AGREEMENTS SIGNED WITH THE LAND OWNERS, IN LIEU OF THE LAND TAKEN FROM THEM. IT WAS CONTENDED BY THE LD. AUTHORISED REPRESENTATIVE THAT IN VIEW OF THIS FACT NO REVENUE SAID FOUR FLATS AND FOUR PARKING SPACES. HAVING CONSIDERED THE ARGUMENTS OF THE LD. AUTHORISED REPRESENTATIVE OF THE APPELLANT, I FIND THAT THERE IS SUBSTANTIAL FORCE IN THE SUBMISSION OF THE AUTHORISED T GIVEN BENEFIT OF NOTIONAL LAND COST TO THE APPELLANT AGAINST THE SAID 4 FLATS AND 4 PARKING SPACES GIVEN TO LAND OWNERS IN LIEU CONSTRUCTION. IT HAS IN THE PROJECTS NAMED RASH BIHARI AVENUE PROJECT. ES HAVE BEEN SOLD OUT TO LAND LAND OWNERS, I AM OF CORRESPONDING PROPORTIONATE COST IS ELIGIBLE FOR DEDUCTION. THEREFORE, THE TOTAL COST INCURRED UPTO THE END OF THE RELEVANT PREVIOUS YEAR IS ALLOCATED BETWEEN 4 FLATS AND 4 PARKING SPACES GIVEN TO THE LAND OWNERS ON ESTIMATED ACTUAL COST CE TOWARDS UNSOLD PORTION OF OTHER FLATS WHICH WERE UNDER CONSTRUCTION PREVIOUS YEAR TO BE ADDED. IN ACCORDANCE WITH THE ABOVE WORKING IT IS HELD THAT THE COST OR VIVEKANANDA SARANI PROJECT TO THE EXTENT OF RS. 46,52,573/ YEAR RELEVANT TO THE INSTANT ASSESSMENT YEAR. I AM OF THE CONSIDERED VIEW THAT THE APPELLANT WAS REQUIRED TO CAPITALIZE THE COST OF THE SAID PROJECT EXTENT OF RS.46,52,573/ ACCORDINGLY, THE ADDITION IS CONFIRMED TO THE ADDITION IS CONFIRMED TO THE EXTENT OF RS.46,52,573/- AND THE APPELLANT GETS RELIEF OF RS.75,40,000/ ALLOWABLE EXPENDITURE IN ACCORDANCE OF THE ABOVE WORKING. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE ADDITION OF RS.75,40,000/ RS.1,21,92,573/- . HENCE, GROUND NO. 8 OF THE APPEAL IS PARTLY ALLOWED. 8.2. THE LD. D/R, COULD NOT CONTROVERT CIT(A). THE ASSESSEE SUBMITS THAT NO AMOUNT CAN BE BROUGHT TO TAX AS THE ACCOUNTS AND SYSTEM OF ACCOUNTING MAIN TAINED BY THE ASSESSEE CORRECT COMPUTATION OF VALUATION OF CLOSING STOCK CONSISTENTLY FOLLOWED BY THE ASSESSEE YEAR AFTER WELL AS THE LD. CIT(A) WA S WRONG ASSESSEE HAS NOT FILED A CROSS ADJUDICATE THIS ISSUE. THE LD. CIT(A) HAS GIVEN A REASONED ORDER ON THIS ISSUE. D/R COULD NOT CONTRO VERT THE FACTUAL FINDING OF THE LD. CIT(A), WE UPHOLD THE SAME AND DISMISS THIS GROUND OF THE REVENUE. 9. GROUND NO. 5 IS GENERAL IN NATURE. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE SD/- [S.S. VISWANETHRA RAVI] JUDICIAL MEMBER DATED : 06.09.2019 {SC SPS} 5 PREVIOUS YEAR TO BE ADDED. IN ACCORDANCE WITH THE ABOVE WORKING IT IS HELD THAT THE COST OR VIVEKANANDA SARANI PROJECT TO THE EXTENT OF RS. 46,52,573/ - IS NOT ALLOWABLE AS DEDUCTION DURING THE PREVIOUS TO THE INSTANT ASSESSMENT YEAR. I AM OF THE CONSIDERED VIEW THAT THE APPELLANT WAS REQUIRED TO CAPITALIZE THE COST OF THE SAID PROJECT EXTENT OF RS.46,52,573/ ACCORDINGLY, THE ADDITION IS CONFIRMED TO THE ADDITION IS CONFIRMED TO THE EXTENT OF AND THE APPELLANT GETS RELIEF OF RS.75,40,000/ - WHICH HAS BEEN HELD AS ALLOWABLE EXPENDITURE IN ACCORDANCE OF THE ABOVE WORKING. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE ADDITION OF RS.75,40,000/ - OUT OF TOTAL ADDITION OF . HENCE, GROUND NO. 8 OF THE APPEAL IS PARTLY ALLOWED. THE LD. D/R, COULD NOT CONTROVERT THE ABOVE FACTUAL COMPUTATION MADE BY THE LD. CIT(A). THE ASSESSEE SUBMITS THAT NO AMOUNT CAN BE BROUGHT TO TAX AS THE ACCOUNTS AND TAINED BY THE ASSESSEE DISCLOSES THE CORRECT COMPUTATION OF VALUATION OF CLOSING STOCK AS PER THE METHOD OF ACCOUNTING CONSISTENTLY FOLLOWED BY THE ASSESSEE YEAR AFTER YEAR AND THAT THE ASSESSING OFFICER AS S WRONG IS NOT ACCEPTING THE SAME. AS THE LD. COUNSEL FOR THE ASSESSEE HAS NOT FILED A CROSS -APPEAL OR CROSS- OBJECTION ON THIS MATTER, WE DO NOT THE LD. CIT(A) HAS GIVEN A REASONED ORDER ON THIS ISSUE. VERT THE FACTUAL FINDING OF THE LD. CIT(A), WE UPHOLD THE SAME AND DISMISS THIS GROUND OF THE REVENUE. GROUND NO. 5 IS GENERAL IN NATURE. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE 6 TH DAY OF SEPTEMBER, 2019. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO. 1787/KOL/2013 ASSESSMENT YEAR: 2009-10 M/S. BALAJI DEVELOPERS IN ACCORDANCE WITH THE ABOVE WORKING IT IS HELD THAT THE COST OR VIVEKANANDA SARANI IS NOT ALLOWABLE AS DEDUCTION DURING THE PREVIOUS TO THE INSTANT ASSESSMENT YEAR. I AM OF THE CONSIDERED VIEW THAT THE APPELLANT WAS REQUIRED TO CAPITALIZE THE COST OF THE SAID PROJECT EXTENT OF RS.46,52,573/ -. ACCORDINGLY, THE ADDITION IS CONFIRMED TO THE ADDITION IS CONFIRMED TO THE EXTENT OF WHICH HAS BEEN HELD AS ALLOWABLE EXPENDITURE IN ACCORDANCE OF THE ABOVE WORKING. ACCORDINGLY, THE ASSESSING OUT OF TOTAL ADDITION OF FACTUAL COMPUTATION MADE BY THE LD. CIT(A). THE ASSESSEE SUBMITS THAT NO AMOUNT CAN BE BROUGHT TO TAX AS THE ACCOUNTS AND DISCLOSES THE CORRECT PROFITS AND THE AS PER THE METHOD OF ACCOUNTING THE ASSESSING OFFICER AS AS THE LD. COUNSEL FOR THE OBJECTION ON THIS MATTER, WE DO NOT THE LD. CIT(A) HAS GIVEN A REASONED ORDER ON THIS ISSUE. AS THE LD. VERT THE FACTUAL FINDING OF THE LD. CIT(A), WE UPHOLD THE SAME AND SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO: 1. M/S. BALAJI DEVELOPERS 102C, BALLYGUNGE PLACE KOLKATA 700 019 2. INCOME TAX OFFICER, WARD- 30(1), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6 30(1), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 1787/KOL/2013 ASSESSMENT YEAR: 2009-10 M/S. BALAJI DEVELOPERS TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES